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Section I of this paper contains a discussion of the purpose of access rules, and Section II examines the Fund’s liquidity position. Section III discusses the potential demand for Fund resources resulting from several possible shocks. Section IV considers recent trends in access decisions and evaluates how they have conformed to the principles underlying the access rules, and whether the Fund’s liquidity would be a constraint to providing similar access in the period ahead. Section V summarizes recent developments in exceptional access and discusses issues pertinent to policy in such cases. Section VI concludes with the list of staff recommendations and the issues for discussion. Draft decisions on access to GRA and PRGF resources are provided in Section VII.
This paper reviews the Fund’s access policy under its main financing facilities in the General Resources Account (GRA) and under the Poverty Reduction and Growth Facility (PRGF). It responds to the Board’s request for a periodic review of the access policy, that is, the rules and practices that govern the amount of financing the Fund makes available to its members.
The Board completed its last review of access policy in February 2008 (2008 Access Policy Review). At that time, while some Directors saw the need for an increase in the limits on normal access to Fund resources, most Directors supported maintaining the access limits in the credit tranches and under the Extended Fund Facility (EFF) and the separate overall limits on access to resources in the General Resources Account (GRA) at the present level of 100 percent of quota on an annual basis and 300 percent on a cumulative basis. During the 2008 Spring Meetings, the International Monetary and Financial Committee (IMFC) encouraged the Executive Board to consider raising access limits. In doing so, the IMFC recognized that emerging market and developing countries are not immune to a broadening of the problems in financial markets and looked forward to reviewing progress at its next meeting. A fresh look at access limits is warranted in light of the broader review of the Fund’s lending framework which is underway, and to take account of the April 28, 2008 agreement on a second round of ad hoc quota increases under the quota and voice reform.
A recovery is underway, but the economic fallout from the global pandemic could be with us for years to come. With the crisis exacerbating prepandemic vulnerabilities, country prospects are diverging. Nearly half of emerging market and developing economies and some middle-income countries are now at risk of falling further behind, undoing much of the progress made toward achieving the UN Sustainable Development Goals.
This report seeks to help the IMF enhance its effectiveness by identifying major recurring issues from the IEO’s first 20 evaluations and assessing where they stand. The IMF’s core areas of responsibility are surveillance, lending, and capacity development. The aim of this report is to strengthen the follow-up process by focusing on key issues that recurred in IEO evaluations, rather than on specific recommendations on their implementation. The IEO believes that a framework of reviewing and monitoring recurring issues would be useful in establishing incentives for progress, strengthening the Board’s oversight, and providing learning opportunities for the IMF.
Weighing up the costs and benefits of economic interdependence in a finance-driven world, this book argues that globalization, understood and promoted as absolute freedom for all forms of capital, has been oversold to the Global South, and that the South should be as selective about globalization as the North. ‘Liberalization, Financial Instability and Economic Development’ challenges the orthodoxy on the link between financial deepening and economic growth, as well as that between the efficiency of financial markets and the benefits of liberalization. Ultimately, the author urges developing countries to control capital flows and asset bubbles, preventing financial fragility and crises, and recommends regional policy options for managing capital flows and exchange rates.
In the context of a relatively benign international environment with limited balance of payments needs, recourse to Fund resources has declined across several dimensions: fewer GRA arrangements; lower outstanding Fund resources; and a smaller average access under new PRGF arrangements.
The paper proposes a doubling of access limits on concessional lending to ensure that the Fund can respond effectively to the needs of low-income countries (LICs) severely affected by the current world economic downturn. Pending adoption of broader reforms to the LIC facilities architecture, higher access limits under the Poverty Reduction and Growth Facility (PRGF) and Exogenous Shocks Facility-High-Access Component (ESF-HAC) would give the Fund greater flexibility in assisting LICs, which have become more exposed to global volatility over time. A doubling of access limits would restore them to their 1998 levels in percent of GDP and would be consistent with the approach taken in determining new access limits for General Resources Account (GRA) resources. It would also be in line with the projected doubling of medium-term demand for concessional resources.
This Handbook provides guidance to staff on the IMF’s concessional financial facilities and non-financial instruments for low-income countries (LICs), defined here as all countries eligible to obtain concessional financing from the Fund. It updates the previous version of the Handbook that was published in December 2017 (IMF, 2017e) by incorporating modifications resulting from the 2018–19 Review of Facilities for Low-Income Countries and Review of the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries (IMF, 2019a, b), approved by the Board in May 2019; the reforms introduced in 2021 on the basis of the Board paper Fund Concessional Financial Support for Low-Income Countries—Responding to the Pandemic (IMF, 2021a), approved in July 2021; and a number of other recent Board papers. Designed as a comprehensive reference tool for program work on LICs, the Handbook also refers, in summary form, to a range of relevant policies that apply more generally to IMF members. As with all guidance notes, the relevant IMF Executive Board decisions including the terms of the various LIC Trust Instruments that have been adopted by the Board, remain the primary legal authority on the matters covered in the Handbook.
The Executive Board of the International Monetary Fund (IMF) considered a series of papers to reform the Fund's nonconcessional lending framework. This culminated in the approval of a major overhaul of the IMF’s lending framework, including the creation of a new Flexible Credit Line (FCL). The changes to the IMF’s lending framework which are described in GRA Lending Toolkit and Conditionality—Reform Proposalsand GRA Lending Toolkit and Conditionality—Reform Proposals—Revised Proposed Decisions include: • modernizing IMF conditionality for all borrowers, • introducing a new Flexible Credit Line, • enhancing the flexibility of the Fund’s traditional stand-by arrangement, • doubling normal access limits for nonconessional resources, • simplifying cost and maturity structures, and • eliminating certain seldom-used facilities. The series of papers are: Review of Fund Facilities—Analytical Basis for Fund Lending and Reform Options, Conditionality in fund-Supported Programs—Purposes, Modalities and Options for Reform, Charges and Maturities and Proposals for Reform, Supplement 1 and Supplement 2, Review of Fund Facilities—Analytical Basis for Fund Lending and Reform Options, and Review of Limits on Access to Financing in the Credit Tranches and Under the Extended Fund Facility, and Overall Access Limits Under the General Resources Account provide the background on the earlier discussion of reforms in each of these areas.